Hope you are doing well.
Skilled human resource supply is probably inadequate and it’s always good to have companies that can provide expert engineering staffing solutions.
Recently, while screening for investment opportunities, I came across a micro cap company Aarvi Encon Ltd which provides technical staffing solutions.
On the cursory glance, the numbers looked interesting and decided to dig deeper.
Below, we have shared notes from the Jun’23 investor presentation and CRISIL credit rating report of the company. Hope you find the details useful for your own investments or to add the stock to your watch list.
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Aarvi Encon – Notes from Jun’23 investor presentation and CRISIL credit rating report
– General Points
- Aarvi provides engineers /designers/technicians right from conceptualization of the project to Design to Construction to Pre-commissioning & Commissioning to Operations and Maintenance of the plant
- The company has deployed over 30,000 personnel since inception and has a current deployed team strength of more than 5,000 professionals
- It has a large in-house database i.e. more than 800,000 resume data base
- The company targets sectors like oil & gas, power, LNG, PNG, refinery, petrochemical, pipeline, wind power, solar power, offshore, E&P, infrastructure, etc.
- The company has an esteemed clientele list including marquee names like, Larsen & Turbo Industries, Cairn, Reliance Industries Limited, Engineering India Limited, Indian Oil, Technip, etc.
- Promoter’s i.e., Sanghavi family have an experience of over 5 decades in the technical and engineering manpower supply industry
- Operations are managed by Mr. Virendra Sanghavi and his son, Mr. Jaydev Sanghavi
– Business details
- FY 23 Business mix – Manpower outsourcing: 83%, O&M: 17%
- FY 23 Industry wise revenue – Engineering: 35%, Refinery: 24%, Oil & Gas: 15%, Renewable: 8%, Chemicals: 5%, etc.
- Contribution from Renewables and Information Technology sector is expected to increase over the near term
- Company has cash and cash equivalent of Rs 4.38 crore as on March 31, 2023. Company has no material capex plans over the medium term
– Staffing Industry
- Temporary/Flexi staffing firms retain workers & supply temporary workforce to other companies for specific assignments
- Customers signs agreement with flexi staffing companies where the later supplies flexi workforce
- Staffing companies hire workers and send them as flexi workforce to meet client requirements. Staffing companies take care of the salaries and benefits of these workers
- Over the past five years, the industry has grown at a rate of 20-25% per year
- Staffing industry in India essentially provides a platform for recognized employment, work choice, reasonable compensation, annual benefits, and health benefits for the temporary workforce
- The skilled human resource supply industry is highly fragmented due to a low entry barrier, leading to intense competition
- Further, the tender-based nature of operations triggers intense price competition among players
Disclaimer: This is not a recommendation to buy/sell Aarvi Encon. The securities quoted are for illustration only and are not recommendatory.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
Address – 7, Panch Ratan, 7/128, Swaroop Nagar, Kanpur – 208002, Contact No. – +91-7275050062
Compliance Officer – Mr. Ekansh Mittal, +91-9818866676, ekansh@
Grievance Redressal – Mittal Consulting, grievances@
“Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.
“Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
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Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No
Whether it or its associates have received any compensation from the subject company in the past twelve months – No
Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No
Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No
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